LEGAL AND FINANCIAL ISSUES Model Grant Agreement LEGAL AND FINANCIAL ISSUES

General Model Grant Agreement Marie-Sklodowska Curie MGAs Horizon 2020 model Grant Agreement: Specific models General Model Grant Agreement ERC MGAs SME instrument MGAs Co-fund MGAs Marie-Sklodowska Curie MGAs

Specific provisions Annexes III General conditions Annex II Horizon 2020 model Grant Agreement: A single document with all provisions Options Core text Special clauses Specific provisions Annexes III General conditions Annex II FP7 Disclaimer: Information not legally binding

Disclaimer: Information not legally binding H2020 Grant Agreement Chapter 1: General Single article: subject of the agreement Chapter 2: Action Action, duration and budget Chapter 3: Grant Amount, reimbursement rates, eligible costs Chapter 4: Rights and obligations To implement the action: resources, in-kind contributions, subcontracts Grant administration: reporting, payments, audits Background and results: access rights, protection of results, exploitation, dissemination Others: gender equality, ethics, confidentiality Chapter 5: Division of roles Roles and responsibilities, internal arrangements Chapter 6: Rejection, reduction, penalties, termination, etc. Rejection, reduction, recovery and penalties Suspension and termination of the action Chapter 7: Final provisions Accession, entry into force, amendments, applicable law Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Horizon 2020 model Grant Agreement: Annexes to the grant Annex 1: Description of the action Annex 2: Estimated budget Annex 3: Accession Forms, 3a & 3b Annex 4: Financial statements Annex 5: Certificate on the financial statements Annex 6: Certificate on the methodology Disclaimer: Information not legally binding

Maximum reimbursement rates Demonstration activities One project = One rate for research actions Maximum reimbursement rates Research and technological development activities (*) Demonstration activities Other activities Network of excellence 50% 75% (**) 100% Collaborative project(****) Coordination and support action 100% (***) For all beneficiaries and activities in the grant. Defined in the Work Programme: Up to 100 % of the eligible costs for research actions; Up to 70 % for innovation actions (exception for non-profit organisations – up to 100%). (*) Research and technological development includes scientific coordination. (**) For beneficiaries that are non-profit public bodies, secondary and higher education establishments, research organisations and SMEs (***) The reimbursement of indirect eligible costs, in the case of coordination and support actions, may reach a maximum 7% of the direct eligible costs, excluding the direct eligible costs for subcontracting and the costs of resources made available by third parties which are not used on the premises of the beneficiary. (****) Including research for the benefit of specific groups (in particular SMEs) Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Single FLAT RATE for indirect costs Simplifying project management and removing recurrent errors. 20% ? 60% ? Real ? Simplified? Single model: 25 % Flat Rate Disclaimer: Information not legally binding

NEW: non-deductible VAT paid is also eligible Forms of costs Actual costs Costs actually incurred, identifiable and verifiable, recorded in the accounts, etc. NEW: non-deductible VAT paid is also eligible Unit costs A fixed amount per unit determined by the Commission Example: SME owners' unit cost For average personnel cost (based on the usual accounting practices – with or without COMUC) Flat rate A perc enta ge to be calc ulat ed on the eligi ble cost s Exa mple : 25 % flat rate for indir ect costs Lump sum A glob al amo unt to cove r one or seve ral cost cate gori es Exa mple : Phas e 1 of the SME instr ume nt

Disclaimer: Information not legally binding Budget categories and Forms of costs Disclaimer: Information not legally binding

Budget transfers and re-allocation Budget categories: budget transfers Budget transfers and re-allocation Amendment needed? From one beneficiary to another NO From one budget category to another Re-allocation of Annex 1 tasks YES Transfers between forms of costs (actual costs, unit costs, etc.) YES if no budget was foreseen for the "form" receiving the transfer New subcontracts YES (strongly advised) Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Budget categories: budget transfers Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Duration and start date of the action Duration: in months, established in Article 3 GA Start Date: established in Article 3 GA, usually the first day of a month By default: the month following the entry into force Only if justified: fixed date  General rule: later than the date of entry into force Exceptionally: between the date of the submission of grant application and the entry into force Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Payments Time-to-Pay From One Pre-financing 30 days From: entry into force or 10 days before the starting date (whichever is the latest) → Retention 5 % of maximum grant for the Guarantee Fund Interim Payments 90 days From reception of periodic report → Based on financial statements (EU contribution= eligible costs approved X reimbursement rate) → Limit = 90 % of the maximum grant (Retention 10%)   Payment of the Balance From reception of final reports Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Third parties: basics  What is a third party? A legal entity which carries out work of the action, supplies goods or provide services for the action, but which did not sign the grant agreement  What types of third parties? 1. Third parties directly carrying out part of the work described in Annex 1 2. Other third parties providing resources, goods or services to the beneficiaries for them to carry out the work described in Annex 1 3. Third parties receiving financial support (money) from the beneficiary as part of the action. Only when authorised in the call THIRD PARTIES Disclaimer: Information not legally binding

Third parties with a legal link 1. Third parties carrying out work in the action Similar to FP7 Special Clause 10 Must be identified in the GA Same cost eligibility criteria than for beneficiaries NEW: COM or Agency may request them to accept joint and several liability for their EU contribution Beneficiary Affiliated entities Third parties with a legal link Subcontractors Linked third parties !

Third parties with a legal link 1. Third parties carrying out work in the action Ensure best value for money and avoid conflict of interests Subcontracting between beneficiaries is not allowed. Subcontracting to affiliates is generally not allowed either Estimated costs and tasks must be identified in the budget and in Annex 1 NEW: if not identified in Annex 1, Commission may still approve them (beneficiary bears the risk of rejection) E.g.: Testing described in Annex 1 as action task Beneficiary Affiliated entities Third parties with a legal link Subcontractors Linked third parties !

necessary for the implementation 2. Other third parties For the purchase of goods, works or services Ensure best value for money and avoid any conflict of interests E.g.: CFS, supply of consumables, etc. Beneficiary Contracts necessary for the implementation In- kind contributions Free of charge or against payment Only the actual eligible costs of the third party may be charged Must be set out in Annex 1 NEW: if not identified in Annex 1, Commission may still approve them (beneficiary bears the risk of rejection) E.g.: seconded staff, use of equipment !

Financial support to third parties Beneficiary Financial support to third parties 'Cascading grants': Equivalent to FP7 Special Clause 42 Prizes: awarded by the beneficiary as part of the action Option to be used ONLY if foreseen in the Work Programme Conditions set out in Annex 1 E.g.: users, experimenters and suppliers for which financial support is granted (call: H2020-ICT-2015)

Third parties: summary Types of third parties CHARACTERISTICS Does work of the action Provides resources or services What is eligible? Must be indicated in Annex 1 Indirect costs Selecting the third party Articles Linked third party YES NO Costs Must be affiliated or have a legal link Article 14 Subcontractors Price Best value for money, avoid conflict of interest Article 13 Third party providing in-kind contributions Not used to circumvent the rules Articles 11 and 12 Contractors Article 10 Financial support to third parties Only if allowed in the call The beneficiaries’ activity consists in providing financial support to the target population According to the conditions in Annex 1 Article 15

What workforce contracts can you declare under personnel costs? Standard case: persons hired by the beneficiary via an employment contract (qualified as such under national law; and for whom the hiring entity pays social security contributions) Other cases: → Employees of a third party seconded to the beneficiary (must be set in Annex 1!) → Natural persons hired directly via a contract other than an employment contract if: They work under hierarchical dependence within the beneficiary structure and (in general) work at the beneficiary's premises The result of the work belongs to the beneficiary The costs are similar than those of an employee of the beneficiary with similar tasks PERSONNEL COSTS Disclaimer: Information not legally binding

Additional remuneration Personnel costs: Calculation Hours worked  Hourly rate EUR/hour Additional remuneration Only eligible for non- profit legal entities Formula for actual costs & specific unit costs Time records

Personnel costs: hourly rate How to determine the Hourly Rate A: general case Hourly rate calculated as defined in the model GA B: if you use average personnel costs: Hourly rate calculated by the beneficiary in accordance to its usual accounting practices C: if you are a SME owner without a salary or a natural person without a salary Hourly rate formula fixed by the Commission ACTUAL COSTS UNIT COSTS

Actual Personnel Cost = Hours worked for the project x Hourly rate Actual personnel costs: hourly rate calculation Actual Personnel Cost = Hours worked for the project x Hourly rate where Annual personnel costs Annual productive hours Hourly rate =  The hourly rate is to be calculated per financial year  If the financial year is not closed at the time of reporting, the beneficiary must use the last closed financial year available. Disclaimer: Information not legally binding

Hourly rate of 2015 also for these months Actual personnel costs: hourly rate calculation Use of the last closed financial year 01/10/2014 31/03/2016 Reporting period (example) 2014 2015 2016 Hourly rate of 2014 Hourly rate of 2015 also for these months Hourly rate of 2015 ADVANTAGES FOR THE BENEFICIARIES NO ADJUSTMENTS TO BE DECLARED IN THE NEXT PERIOD LEGAL CERTAINTY: NO DOUBTS ABOUT WHAT PERIOD AND WHAT DATA MUST BE USED FOR THE CALCULATION REMOVES ERRORS DUE TO INCORRECT CALCULATIONS FOR FRACTIONS OF A YEAR Disclaimer: Information not legally binding

Actual personnel costs: cost structure TOTAL REMUNERATION Standard remuneration Additional remuneration Basic Salary "Mandatory extras" Fixed by law or by contract to remunerate the main activity of the employee Payment not subject to discretion by the employer Not linked to a specific project Examples: 13th month, hazardous work allowance, etc. Other bonuses Only eligible for non- profit legal entities Subject to specific eligibility criteria Triggered by the participation in a specific project Hourly rate Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Actual personnel costs: annual productive hours 1720 hours you must use this option if the employment contract does not specify the working time conditions or if the "annual workable hours" cannot be determined Individual annual productive hours Formula: annual workable hours + overtime - absences Standard annual productive hours According to the beneficiary's usual accounting practices. Minimum threshold: annual productive hours ≥ 90 % of the standard annual workable hours ! Advice Disclaimer: Information not legally binding

Disclaimer: Information not legally binding For purchases in other currencies  conversion into Euros according to its usual accounting practice  Beneficiary´s accounts in €  Beneficiary´s accounts in other currency Average of the daily exchange rates published in the Official Journal of the EU calculated over the reporting period. Exchange rates provisions Calculation shortcut: you may use the editable charts on the website of the European Central Bank at: http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html Other financial issues Disclaimer: Information not legally binding

Receipts Receipts Financial contributions specifically assigned by Income generated by the action (except for action´s results) Income generated from the sale of assets purchased in the GA In-kind contributions: - speci ficall y for the actio n -received free of charge Financial contributions specifically assigned by the donors to finance the eligible costs No-profit rule applied at project level, not per beneficiary! Disclaimer: Information not legally binding

Final grant amount: calculation Step 1 — Application of reimbursement rates to eligible costs Step 2 — Limit to the maximum grant amount The grant amount following Steps 1 and 2 is the lower of the two amounts. Step 3 — Reduction due to the no-profit rule Step 4 — Reduction due to improper implementation or breach of other obligations under the GA at the payment of the balance Final grant amount is the lower of the following two amounts: Amount obtained following Steps 1 to 3  Amount obtained in Step 4 Total approved eligible costs (actual costs, unit costs, flat-rate and lump sum costs, if any) X reimbursement rate (100 % for research actions, 70% for innovation actions) The grant amount obtained in Step 1 is capped at the maximum grant amount set out in the GA Profit of the action = Grant amount obtained in Step 2 + Receipts – Total eligible costs of the action If Profit > 0  grant amount obtained in Step 2 is reduced If Profit < or = 0  grant amount obtained in Step 2 is not reduced Disclaimer: Information not legally binding

Final grant amount: example Maximum grant amount Approved eligible costs Funding rate If Receipts If Reduction 200 220 100% 30 20 Step 1 Total approved eligible costs X reimbursement rate 220 * 100 % = 220 Step 2 The lower between Step 1 and the maximum amount of the grant Lower between (220; 200) = 200 Step 3 Step 2 - profit of the action (Profit (only if positive) = Step 2 + receipts – Eligible cost) 200 – (200 + 30 -220)  200 – 10 = 190 Step 4 The lower between Step 3 and the reduced maximum grant amount (if any reduction) Lower between (190; (200 - 20))  Lower between (190; 180) = 180 Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Certificate on the financial statements: Only for final payments when total EU contribution claimed by the beneficiary on the basis of actual costs + unit costs for average personnel ≥ EUR 325.000 ( excluding e.g. flat rates !) Certificate on the methodology: Optional for average personnel costs (now under unit costs) Financial viability Most beneficiaries exempt from detailed analysis; only systematic check for coordinators when requested EU funding for the action is ≥ EUR 500 000 Controls and audits: ex-ante Certificates ! CONTROLS AND AUDITS Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Controls and audits: ex-post Ex-post audits Audits of the Commission limited to two years after the payment of the balance Extension of audit findings Former "extrapolation" (FP7) now included in the MGA In the case of systemic or recurrent errors, irregularities, fraud or breach of obligations Disclaimer: Information not legally binding

Consortium Agreement & Consortium Agreement (CA) Coordinator Partner CA is mandatory unless otherwise specified in the work programme Article 41.3 of the H2020 Model Grant Agreement Characteristics It is a private agreement between the beneficiaries and does not involve the EC (which, however, provides guidance). Deals with the rights and obligations of the beneficiaries amongst themselves. Examples: internal organisation, distribution of EU funding, additional rules on IPR, settlement of disputes, etc. In principle to be concluded before signing the Grant Agreement Consortium Agreement & IPR provisions Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Intellectual Property Rights - I Ownership for the beneficiary who generates results, joint-ownership only in specific circumstances; Protection where appropriate Exploitation General obligation to exploit Dissemination General obligation to disseminate Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Intellectual Property Rights - II Open access obligatory for scientific publications and, to research data (in appropriate areas and if foreseen in the work programme) Additional exploitation /dissemination obligations if in the work programme Visibility of EU funding Use of emblem and standard sentence Access rights for implementation and for exploitation purposes (also for affiliated entities established in MS/AC) for the Union under all parts of the programme and for MS under 'Secure societies' tel:081657715 Disclaimer: Information not legally binding

Disclaimer: Information not legally binding Intellectual Property Rights - III Transfer and (exclusive) licences outside the Union/Associated Countries the grant agreement may foresee right to object if a beneficiary has received Union funding Tailor-made provisions for specific actions & in the specific models Disclaimer: Information not legally binding

Participant Portal ADDITIONAL INFO: At: http://ec.europa.eu/research/participants/portal/desktop/en/home.html Horizon 2020 Annotated Grant Agreement http://ec.europa.eu/research/participants/data/ref/h2020/grants_manual/amga/h2020-amga_en.pdf Horizon 2020 On-line Manual http://ec.europa.eu/research/participants/portal/desktop/en/funding/guide.html# Questions? Research Enquiry Service http://ec.europa.eu/research/enquiries

Thank you for your attention! Find out more: http://ec.europa.eu/programmes/horizon2020/